Insurance clients prefer e-delivery: study

The insurance industry is trailing behind other industries in keeping customers informed electronically, a recent research study concludes.

Commissioned by U.S.-based NewRiver, a company that provides technology solutions to financial services firms, the study found variable annuity (VA) and variable universal life (VUL) policyholders had a strong inclination towards receiving prospectus and related compliance documents electronically.

This flies in the face of the preconceived notion that the industry’s older customers would be averse to receiving information electronically.

“The majority of those who were either not offered or were not aware of the option of electronic delivery expressed an interest in it,” says Russell E. Planitzer, CEO with NewRiver.

The study reported that more than half of the respondents who were not offered electronic delivery from their VA/VUL company said they would be interested in electronic delivery of their documents and prospectuses if it were available.

Nearly 91% of respondents said they were comfortable using computers for personal financial management, although a staggering 86% were clueless about how to receive their financial information electronically.

Industry experts say this is a missed opportunity for variable annuity and universal life companies, many of which are reluctant or slow to move from paper to electronic disclosure.

“This is a call to action for the insurance industry,” cautions Planitzer adding that “E-delivery and layered disclosure is rapidly converging on the VA industry and is set to create the same enhanced user experience that mutual fund investors are getting today.”

The Canadian insurance industry has also been slow to adopt electronic processing of information. While other industries have migrated to technological solutions, the insurance sector continues to be burdened by archaic paper application process and unwillingness to change to modern delivery systems.

As the sense of urgency grows among senior decision makers of the industry, there has been a push to change the overall industry attitude towards technology.

Leading the process is the Canadian Life Insurance Standards Association (CLIEDIS), which recently hosted a meeting of executives, advisors, industry suppliers and technology vendors to discuss the benefits of getting rid of paper and moving toward comprehensive electronic processes.

(03/09/10)